Brexit – overview of new trading and VAT rules
Feb 12, 2021
Since 1 January 2021 there are new Brexit rules that apply to doing business with Europe. You can check using the links below what you need to do if you are:
- applying for an EORI number
- importing or exporting goods and making customs declarations
- calculating which customs tariffs apply for transporting your goods
- calculating VAT on your import or export transactions
- moving goods to Northern Ireland
- SME Brexit support fund
Perhaps unsurprisingly, Brexit has caused extra layers of administration, courier fees, VAT problems and unexpected customs invoices for both importers and exporters. VAT is now being collected at the point of sale rather than at the point of importation. This means that overseas retailers sending goods to the UK are expected to register for UK VAT and account for it to HMRC if the sale value is less than €150 (£135). With all the extra red tape at borders, smaller businesses are now evaluating whether it is worth their while exporting to the EU and the reverse is equally true.
The changes are problematic, and it will certainly take some time for any simpler systems to emerge. When the current grace periods come to an end and full customs checks come into force it may affect attitudes further. Key upcoming dates for Brexit are:
- April – the movement of goods rules for products of animal origin come into force
- June – the settlement scheme registration process for people from the EU to remain in the UK ends
- July – new border controls will come into force after the six-month grace period and customs declarations will become permanent
We can but hope that businesses will be able to adapt, and that we will see new solutions to smooth trade gradually emerge. Further help is available on the Gov.uk website, where you can use the transition checker to understand HMRC processes for importing, exporting or customs relief, or call the Customs and International Trade Helpline.